ONLINE FOREX BROKER
2019-11-11 • Updated
US equities ended mostly higher yesterday in the post-holiday trade buoyed by gains in technology, healthcare in and financial shares. A recent drop in oil prices dragged energy stocks a bit lower but failed to divert the composite indices from their overall bull rally.
S&P500 is currently moving within the consolidation range of $2405 – 2450. Until the lower border of the range is still intact we expect it moving sideways.
Nasdaq ticked a few points higher today to $6150. It has a room for further extension towards $6343 (its all-time high). On the downside, there is a solid support at $5995 (18 May low).
A divided FOMC meeting minutes released overnight also helped the US shares to climb higher. The minutes indicated that some members are concerned with the inflation picking up in disaccord with the Fed’s monetary policy stimulus removal. As for the discussion on when to start the process of balance sheet wind down, the Fed is divided. Some suggest it can start as early as September, others are not willing to pre-commit to a start date this early. So, in the future, tepid economic data (a miss on the tomorrow’s NFP, e.g.), as well as inflation rate below the Fed's cherished target, may have a bearing on the Fed’s plans to hike one more time this year and to commence a balance sheet run-off. This would be extremely positive for the US equities as lower interest rates make them more attractive than saving money in a bank or holding government bonds.
While in the short-term there might be some retracements in the US equities, in the near-term we expect them to rise higher as soon as second quarter earnings data is published. Some analysts project surprisingly strong releases. The early results from the reporters like Nike, Oracle and Darden were truly impressive. Profits from the companies that have already posted their earning are up nearly 12% from the second quarter results of last year. These early indications might not be sufficient to be extremely bullish on the US equities though. Earning season has not really started yet. It won’t commence until July 14, when JPMorgan and Wells Fargo start reporting their profits, but we might be encouraged at least by this early reporting and wait for even better prints.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
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